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The red named ships are Navy ships. Those are what you want to sink.
The gray named ships are EITC, East India Trading Co. You can sink them and get plunder, but you'll never find Luther on one!
Oh, and I think if you read the quest closely, it says there is a specific type of ship he'll be on, like "Frigates" or "Galleons" just sink ships of that type if you're in a hurry to find him!
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